A large number of infrastructure construction projects should increase demand for the local logistics and warehouse space across the infrastructure and along the coastal ports of Africa. For example,Tanzania is key shipping port which will need vast meters of industrial space and is it seeking capital flow to become the Jebel Ali model of east Africa. While Nairobi is East Africa’s key trading hub, businesses operating in the region are demanding access to warehousing facilities that are able to offer operational and costs efficiency and safety and security. There is a unique investment opportunity for developers building logistics warehouses –the current logistics market is at a yield of 8.5%. The office and retail sector yields have fallen in 2018 from about 11% three years ago to about 8%, while residential property yields are now at 5.6%. We see logistics as a targeted asset class for an entry point and value sustainability, however, this vehicle would need a skilled developer partnership.

The route to investment in Africa is generally via real estate focused funds they invest across a range of markets to contain risk and maximize return value. The top three real estate private equity firms investing in Africa are Actis Real Estate Fund, Novara Real Estate Fund, and Helios Fund. TPG, KKR, Bain Capital, Colony Capital which bought the Abrajj PE platform. New York-based Blackstone Group is scaling back in Africa after less than 5 years after they tried to complete a top-down investment approach in Nigeria. Our favorite private equity firm for investment in Africa is Actis Investments fund managers they are socially environmentally responsible fund with 15 billion dollars in assets funded.

The commercial real estate market in Africa, like India, faces challenges for global fund managers- such as lack of financial integration and transparency, corruption, infrastructure challenges around delivering goods and services, most oil economies are in recession brought on by lower oil prices, which have slashed some government revenues, oil prices have weakened some countries currency and caused dollar shortages frustrating business and households. For the global fund manager, one would need people on the ground, with an original perception of the investment environment to create sustainable value to build performance and to exit. However, to create real value it will take vision and passion to see above the clouds, it is best to leave you with Bill Gates: states concerning Sub Saharan Africa “I believe that the right investments will unlock the continent’s enormous potential. Young Africans will shape the future of not only their own communities but the entire world.

The required structural reforms to achieve a wide range of policy goals tend to be very similar, whether the goal is to become attractive to a more diversified pool of investors (banks, pension funds, insurance companies, and other institutional investors), to enhance the economic impact of these capital flows, or to improve the resilience of a country’s developing financial system. Ultimately, a country’s financial integration into the global economy requires it to adopt and effectively implement global regulatory and disclosure standards and other “financial architecture” found among the developed countries 2019 is the year of implementation of Basel lll which should guide transitional economies to greater investment standards and capital flow.While guiding mature economies to greater portfolio diversification and stable real estate cycles.

The processing of removing friction from the capital flow and portfolio diversification is essential to successful global investing. But more importantly, China, India, Saudi Arabia, Indonesia, Africa, and emerging economies have the key components of both risk and value creation.

INFORMATIONAL ASYMMETRIES IN GLOBAL INVESTING

An empirically tests on home bias information asymmetries and learning global commercial real estate markets.—- found that foreign investors pay a premium of 3.6%, on average, relative to local investors for comparable properties in local markets. The premiums reflect information disadvantages of foreign investors, which are not correlated with the hiring of agents, anchoring to prices in their home market and selection bias. We show that learning from prior acquisition experience significantly reduces information disadvantages of foreign investors. Foreign investors could offset their initial disadvantages relative to the first-time local investors after four acquisition experiences in local markets. Quality of learning through more distant past acquisitions, acquisitions of real estate of the same type and in the same city could also reduce information asymmetries of foreign investors. However, we find that geographic proximity does not explain information asymmetries in cross-border investments experienced by foreign investors.Studies show that foreign investors avert risk when using debt when investing in markets where there maybe informational asymmetries. “The global investor may consider the debt approach which is based on non recourse loan therefore is does not give the home bias team the informational advantage in the same way that an equity investment does states (Mansoor). While others may use the opportunistic approach to global investing especially in countries evolving through the de-leveraging stage of the real estate investment cycle(China). In 2019- 2023 the global trend for capital flow will be operating through joint ventures from private equity and SWF’s investing to curb risk in Asia Pacific.